How does Washington’s tax code compare? Washington does not have a typical individual income tax but does levy a 7.0 percent tax on capital gains income. Washington does not have a corporate income tax but does levy a state gross receipts tax. Washington has a 6.50 percent state sales tax rate and an average combined state and local sales tax rate of 9.38 percent. Washington has a 0.76 percent effective property tax rate on owner-occupied housing value.
Washington has an estate tax. Washington has a 52.8 cents per gallon gas tax rate and a $3.025 cigarette excise tax rate. The State of Washington collects $6,644 in state and local tax collections per capita. Washington has $11,632 in state and local debt per capita and has a 103 percent funded ratio of public pension plans. Washington’s tax system ranks 45th overall on the 2025 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Washington is no exception. The first step towards understanding Washington’s tax code is knowing the basics. How does Washington State collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2024: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
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Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
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States would do better to broaden the sales tax base to include currently exempt classes of final consumption than to impose disproportionate taxes on prepared foods.
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Property taxes are the primary tool for financing local governments and generate a significant share of state and local revenues.
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As much as 98 percent of vaping products sold in the US are illicit. Most states levy an excise tax on vaping products, but these tax systems vary substantially. The result is a messy tax system covering largely illicit products, and no one knows whether taxes are being collected and remitted on most products sold nationwide.
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However well-intended they may be, sales tax holidays remain the same as they always have been—ineffective and inefficient.
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